The National Development Bank (NDB) is trading on thin ice as profits are on a downward spiral and recent indications suggest that they will register a loss for the first time. The Development Bank stands at P320 million in arrears, the main factor that has pit management against staff.
WeekendPost is in possession of documents that illustrate disagreements between management and staff concerning the financial standing and future of the bank. Whistle blowers at the bank have revealed that the 2014/15 financial report which is expected to register a loss of the bank for the first time is still kept under the carpet.
“The Bank is anticipating an operational loss due to high impairments and provision thereof, an interest rate constrained environment, leading to reduced liquidity and this scenario is not only peculiar to NDB,” NDB Head of Branding, Marketing and Communications Harry Marks said.
It is understood that while the financials for 2014 are yet to be approved – the bank is anticipating an operational loss.
Documents passed to this publication, confirm the anticipated loss – the financial position of the bank is in a disturbing state and this is exacerbated by the high level of non-performing accounts.
The bank has an unprecedented number of non-performing accounts. The total NDB portfolio is P1, 769, 398, 215.00 with total arrears at P319, 035 431.00,” states a letter sent to Minister of Finance and Development Planning Kenneth Matambo dated 16 February 2015 which has been passed to this publication.
“The Bank is constantly borrowing from other commercial Banks which it competes with to lend to the general public. These commercial banks lend NDB funds at unfavourable rates and very onerous conditions as they have taken the view that NDB is a high credit risk – especially because of its management inability to curb the bad debt situation that is spiraling out of control,” the letter reads.
It is understood that the commercial banks often require additional surety or guarantee from government because of the shaky ground on which the bank finances are standing. In another letter dated 12 December 2014 from the National Development bank Employees Union (NDBEU) to the board chairperson, the bank employees are concerned about the bank’s debt.
“To date, and as is the case every year, management is struggling to persuade the external auditors to endorse the annual accounts. As usual, management and staff are called upon to cook up some gymnastic explanation with regard to its bad debt provisioning methodology, and generally account for how it has factored the impact of its substantial uncollectable debt. Such a situation cannot be allowed to persist as an annual ritual, year in and year out.”
According to the information, the bank’s financial position has also been negatively impacted by the decision on implementation of several projects (refurbishment, rebranding etc), all done within a relative short time.
The Some employees state that prioritization on project implementation, employees’ state, was not at all well carried out despite very restrained resources. Refurbishments, sources say were done at the tune of 85 million of which P6.5 million was splashed at the rented Palapye branch.
“Naturally therefore certain projects have now been stopped midway. The office refurbishment and rebranding project has been stalled for example, which presents a very embarrassing scenario given that management has been advertising extensively to the general public that they will now be seeing a brand new bank,” NDBEU said through their letter to bank board Chairperson Mr. L. Seitei who has served for more than 10 years in the position.
This publication is informed that the bank is currently faced with challenges in making disbursements at adequate levels because there are insufficient funds for loan disbursements. This, it is believed, has resulted in delayed service delivery and is affecting the credibility of the bank. “Yet there is no formal or open communication to staff with regard to details of the liquidity situation and what they should expect, or what is expected of them.”
According to Marks, overall the banking sector has been experiencing a decline in profitability due to the aftershocks of the 2008 world economic meltdown and partly due to a combination of the factors stated. In addition NDB’s development mandate focuses on start-ups and sectors that are susceptible to diseases and drought such as agriculture, he added. NDB’s primary role is to provide Agricultural loans to farmers and/or potential farmers.
Although the bank said to be in financial trouble, the NDB spokesperson explained that the bank has been performing well since 2010; with total assets increasing by 60% from P1 billion to P1.6 billion in 2014 as a result of an increase in net loans and advances.
However he conceded that the bank’s financial performance has been declining: “the bank has also been profitable during this period (since 2010) with profit declining yearly at P57.8million, P48.6million, P40.5 million, and P45.8million in 2010, 2011, 2012 and 2013 respectively.
NDB employees have previously warned the bank management that a downward spiral in performance would ultimately lead the bank to a position that is not favourable for stakeholders. Some stakeholders are already aware that the bank is facing very serious liquidity problems and is currently unable to pay out loan funds – which is the core mandate – even to applicants whose loans have been approved.
“Loan files that are awaiting disbursement of funds are said to have been stacked up and deliberately delayed as an unofficial internal policy so as to manage the financial crisis. Seasonal agricultural loans, especially those of significant amounts, which should have long been disbursed to farmers for the current rain season, are still pending disbursement. All the while customers have been kept in the dark with regard to what is happening with the processing of their loans,” one of the stakeholders said.
The bank is predicting a loss of an estimated P87 million – which is attributed to lack of financial management. The bank is said to be not performing to its optimum best – in the past five years it was making profits of around P48 million.
When contacted for comment NDBEU President, Gilbert Watshipi was reluctant to share information on the alleged financial crises at the bank. He refused to shed light on any information saying it is internal and insisted that bank management and Finance minister Matambo are in talks with staff to address the challenges faced by the bank. “That issue is internal – and besides we are not allowed to speak to the media,” Watshipi pointed out.
Meanwhile Member of Parliament for Mabule/Goodhope, James Mathokgwane is expected to rally parliament to move a motion calling for a commission of inquiry on alleged maladministration, financial mismanagement, corruption and nepotism at NDB in July sitting.
While there is no hard-and-fast rule in politics, former Molepolole North Member of Parliament, Mohamed Khan says populism acts in the body politic have forced him to quit active partisan politics. He brands this ancient ascription of politics as fake and says it lowers the moral compass of the society.
Khan who finally tasted political victory in the 2014 elections after numerous failed attempts, has decided to leave the ‘dirty game’, and on his way out he characteristically lashed at the current political leaders; including his own party president, Advocate Duma Boko. “I arrived at this decision because I have noticed that there are no genuine politics and politicians. The current leaders, Boko and President Dr Mokgweetsi Masisi are fake politicians who are just practicing populist politics to feed their egos,” he said.
Former Botswana Democratic Party (BDP) parliamentary hopeful, Lawrence Ookeditse has rejected the idea of taking up a crucial role in the Botswana Patriotic Front (BPF) Central Committee following his arrival in the party this week. According to sources close to development, BPF power brokers are coaxing Ookeditse to take up the secretary general position, left vacant by death of Roseline Panzirah-Matshome in November 2020.
Ookeditse’s arrival at BPF is projected to cause conflicts, as some believe they are being overlooked, in favour of a new arrival. The former ruling party strategist has however ruled out the possibility of serving in the party central committee as secretary general, and committed that he will turn down the overture if availed to him by party leadership.
Ookeditse, nevertheless, has indicated that if offered another opportunity to serve in a different capacity, he will gladly accept. “I still need to learn the party, how it functions and all its structures; I must be guided, but given any responsibility I will serve the party as long as it is not the SG position.”
“I joined the BPF with a clear conscious, to further advance my voice and the interests of the constituents of Nata/Gweta which I believe the BDP is no longer capable to execute.” Ookeditse speaks of abject poverty in his constituency and prevalent unemployment among the youth, issues he hopes his new home will prioritise.
He dismissed further allegations that he resigned from the BDP because he was not rewarded for his efforts towards the 2019 general elections. After losing in the BDP primaries in 2018, Ookeditse said, he was offered a job in government but declined to take the post due to his political ambitions. Ookeditse stated that he rejected the offer because, working for government clashed with his political journey.
He insists there are many activists who are more deserving than him; he could have chosen to take up the opportunity that was before him but his conscious for the entire populace’s wellbeing held him back. Ookeditse said there many people in the party who also contributed towards party success, asserting that he only left the BDP because he was concerned about the greater good of the majority not individualism purposes.
According to observers, Ookeditse has been enticed by the prospects of contesting Nata/Gweta constituency in the 2024 general election, following the party’s impressive performance in the last general elections. Nata/Gweta which is a traditional BDP stronghold saw its numbers shrinking to a margin of 1568. BDP represented by Polson Majaga garnered 4754, while BPF which had fielded Joe Linga received 3186 with UDC coming a distant with 1442 votes.
There are reports that Linga will pave way for Ookeditse to contest the constituency in 2024 and the latter is upbeat about the prospects of being elected to parliament. Despite Ookeditse dismissing reports that he is eying the secretary general position, insiders argue that the position will be availed to him nevertheless.
Alternative favourite for the position is Vuyo Notha who is the party Deputy Secretary General. Notha has since assumed duties of the secretariat office on the interim basis. BPF politburo is expected to meet on 25th of January 2020, where the vacancy will be filled.
Botswana Democratic Party (BDP) big wigs have decided to cancel a retreat with the party legislators this weekend owing to increasing numbers of Covid-19 cases. The meeting was billed for this weekend at a place that was to be confirmed, however a communique from the party this past Tuesday reversed the highly anticipated meeting.
“We received a communication this week that the meeting will not go as planned because of rapid spread of Covid-19,” one member of the party Central Committee confirmed to this publication. The gathering was to follow the first of its kind held late last year at party Treasurer Satar Dada’s place.